Bernard Durkan (Kildare North, Fine Gael)
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107. To ask the Minister for Finance the extent to which he has, over the past five years, amended the agreement reached with the troika, resulting in savings to the economy and to taxpayers, including the extent of such savings; and if he will make a statement on the matter. [1805/16]

Michael Noonan (Limerick City, Fine Gael)
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There have been a number of improvements to the terms of our EU-IMF Programme loans since they were initially agreed in late 2010. These changes have included reductions of the interest rates and, in the case of the EU facilities, extensions of maturities. While not part of the EU-IMF Programme we have also negotiated the replacement of the Promissory Notes issued to the Irish Bank Resolution Corporation (IBRC) with a series of longer term, non-amortising floating rate Government bonds. In addition, we made an early repayment of the vast bulk of Ireland's IMF programme loans which resulted in considerable savings.

The savings arising from these measures are set out as follows:

When the programme was initially agreed in late 2010, the average interest rate on the €67.5 billion available to draw down from the external sources was estimated by the EU Commission to be 5.82% on the basis of market rates at that time. The average life of the borrowing was initially set at 7.5 years.

In July 2011, the Euro Area Heads of State or Government (HOSG) agreed to reduce the cost of the European Financial Stability Facility (EFSF) loans, and similar reductions were subsequently agreed for the interest rates on the loans provided by the European Financial Stabilisation Mechanism (EFSM) and also by the three bilateral lenders (UK, Sweden and Denmark).  It is estimated that the interest rate reductions on the EU funding mechanisms and the bilateral loans are worth of the order of €9 billion over the initially envisaged 7½ year term of these loans.  The average maturity of the EFSM and the EFSF loans was extended to a planned 12.5 and 15 years respectively. 

In April 2013, EU Finance Ministers agreed in principle to further extend the maximum weighted average maturities on our EFSF and EFSM loans by up to 7 years, over and above the extension agreed in 2011. This further maturity extension removes a refinancing requirement of some €20 billion for the Irish State in the years 2015 to 2022.   This extension of maturities has a number of significant benefits for Ireland, including smoothing our redemption profile, improving long term debt sustainability and it also has a positive impact on the cost of Exchequer borrowing through creating further downward pressure on our borrowing costs.  As of end-December 2015 the euro equivalent cost of our EU IMF programme loans is estimated by the NTMA to have been 2.2%.

While not part of the EU-IMF Programme, it is also worth mentioning that in February 2013, the Irish Government replaced the Promissory Notes issued to IBRC with a series of longer term, non-amortising floating rate Government bonds. This has resulted in significant benefits to the State, including increasing the weighted average life from c.7-8 years for the Promissory Notes to c.34-35 years for the floating rate notes.

The early repayment of some 81 per cent of IMF loans, which was completed in Quarter 1 of last year, will generate further interest savings, estimated at over €1.5 billion, over the original lifetime of these loans. The current interest rate on the residual IMF loan balance is just 1.05 per cent.

My Department, in conjunction with the National Treasury Management Agency (NTMA), will always seek to avail of any opportunity for savings on the cost of our EU-IMF programme loans.